Usual timescale for buying and payment milestones?

piggeh

After several years of struggling to save for a deposit I am almost now in a position of having a 5% deposit and opened a nationwide save to buy savings account several months ago which I am considering using as a potential mortgage. I've had a look on the forums and MSE pages and couldn't find much about typical timescales in buying a place. With all the other fees and costs involved it will likely mean I'd have to find another few thousand which would take another 3 months - I'm renting at the moment and would prefer to be out of here sooner rather than later!

I also have a couple of likely bits of income when I move out:

£700 deposit return from the flat (may have small deductions)
£1000 cashback on save to buy mortgage product (I assume this may take 30 days to come through after completion)

I could probably persuade the old man to lend me some on the proviso the above monies are paid to him once them come in..

I would prefer to have the ball rolling and meet the costs over the time it takes to complete from subsequent pay cheques. Car is worth £3k if worst came to the worst and something came up early but would prefer not to go there.

So really my question is:

1) What is a typical timescale from offer to completion on a chain free property?
2) What fees do you pay in the first few weeks after an offer is accepted?
3) What other costs will come up in the first month or so?
4) Can any costs be deferred until after completion?

Cornucopia

1) Typically 3-4 months these days. Potentially longer for leasehold, shorter for freehold. I recently sold chain-free/share of freehold, and it took 5 months.

2) Nothing major. You will be asked to pay your solicitor money on account (maybe £250-500) to cover the cost of searches.

3) Nothing major.

4) Not really. The critical dates for money are exchange of contracts and completion.

Having said that, you may get into complications if you enter into the process without having a clear source of deposit funds, and certain lenders may ask for evidence before proceeding with the Mortgage application.

audigex

piggeh wrote: »

After several years of struggling to save for a deposit I am almost now in a position of having a 5% deposit and opened a nationwide save to buy savings account several months ago which I am considering using as a potential mortgage. I've had a look on the forums and MSE pages and couldn't find much about typical timescales in buying a place. With all the other fees and costs involved it will likely mean I'd have to find another few thousand which would take another 3 months - I'm renting at the moment and would prefer to be out of here sooner rather than later!

I also have a couple of likely bits of income when I move out:

£700 deposit return from the flat (may have small deductions)
£1000 cashback on save to buy mortgage product (I assume this may take 30 days to come through after completion)

I could probably persuade the old man to lend me some on the proviso the above monies are paid to him once them come in..

I would prefer to have the ball rolling and meet the costs over the time it takes to complete from subsequent pay cheques. Car is worth £3k if worst came to the worst and something came up early but would prefer not to go there.

So really my question is:

1) What is a typical timescale from offer to completion on a chain free property?
I've recently had 6-8 weeks quoted, which sounds sensible. It depends on various factors though such as the speed your lender processes your application, whether the vendor haggles etc. It's easier on empty properties as you avoid the chain, but even with no real chain there's often a "soft" chain as to when people can move. Mine was based on a no-chain sale to family with a fairly straightforward (read: affordable) mortgage application

2) What fees do you pay in the first few weeks after an offer is accepted?
It varies, but primarily the valuation fee for your mortgage, perhaps the search fees for your solicitor if they request them up front (£200-500) but you can probably find a solicitor who charges these with the main fee. You may also need to pay mortgage fees, but for the most part you'd be daft not to just add these to your mortgage (as they're non refundable. You can simply pay them off immediately after completion though to avoid interest, if you wish). The other main fee is the remainder of the solicitor's legal fees, which is typically the first bill through your letterbox.

3) What other costs will come up in the first month or so?
First month of the house, or first month of the application process? As far as I know the latter is answered above, but you'll need some ready cash to pay TV license, potentially electricity if your new property is on a pre-pay meter etc. You'll also need to arrange insurance immediately, buildings (as required by the lender) as a minimum

4) Can any costs be deferred until after completion?
Most are already due just before/during/after completion: the solicitor can't take any money until it's completed, as his/her job isn't done. Typically they take their money from money lodged with them (so you'd need to give them it just before completion) or as a bill immediately afterward

There's also the electronic transfer fee, which may be part of your solicitors legal fees. Other than that you may want to think about removal costs and new furniture etc, and whether any of your new bills could fall due before payday

As cornucopia mentions, though, your lender may wish to see clear evidence that you have the deposit (and possibly sufficient capital for fees) readily available, particularly if they feel you're potentially already stretching your finances, eg with a 5% deposit

piggeh

Cornucopia wrote: »

1) Typically 3-4 months these days. Potentially longer for leasehold, shorter for freehold. I recently sold chain-free/share of freehold, and it took 5 months.

2) Nothing major. You will be asked to pay your solicitor money on account (maybe £250-500) to cover the cost of searches.

3) Nothing major.

4) Not really. The critical dates for money are exchange of contracts and completion.

Having said that, you may get into complications if you enter into the process without having a clear source of deposit funds, and certain lenders may ask for evidence before proceeding with the Mortgage application.

Thanks for the advice. I will have the deposit available before I take any action, its more the other costs I'm a bit concerned about.

piggeh

audigex wrote: »

There's also the electronic transfer fee, which may be part of your solicitors legal fees. Other than that you may want to think about removal costs and new furniture etc, and whether any of your new bills could fall due before payday

As cornucopia mentions, though, your lender may wish to see clear evidence that you have the deposit (and possibly sufficient capital for fees) readily available, particularly if they feel you're potentially already stretching your finances, eg with a 5% deposit

Thanks. I have furniture sorted eg bed, sofa, tv stand, kitchen stuff, etc. No white goods though, I guess that's something to consider! I pay tv licence by DD, the usual costs of tv licences, utilities etc I'm used to although like you suggested if it's pre-pay that would be a bit more to put up front.

So assuming I cant touch the deposit monies then (as it might scare the banks), I would need roughly:

Day 1: £500 for solicitor to get things moving
Valuation fees?
Days 2-60: surveyor fees?
On completion: moving costs (£400), rest of solicitor fees, potential stamp duty (£1200), white goods (£400) setting up costs eg house insurance, utilities etc

The save to buy products have supposedly free legal fees and a free valuation. Do these remove the solicitors and valuation fees to a large extent?

audigex

Yeah I'd potentially look to have available

Up front (£100-1000)
£500 solicitor fees for searches
£100-400 Valuation/surveyor fees (are these not the same thing?)

Note that you should be able to contact your prospective solicitor and lender and confirm these charges up front: my own is looking to be £150 for a valuation and that's it, but both together could be £1000. Chances are you can choose carefully to ensure you're towards the bottom end

On completion in order to secure the house (£600-2000+)
£600 (?) remainder of solicitors fees
£1200 stamp duty if relevant (not an issue if you're buying for under £125k)

Again these are easily pre-planned as you should already have a quote from the solicitor and stamp duty is easily checked

Immediately after completion to actually move in - I'd reckon on having £1000 handy if possible
£400 moving costs
£400 White goods if needed (£400 sounds sensible for a basic fridge/freezer, washer/dryer and microwave, but possible a little more if you need a cooker too)
£100-400 to pay insurance, electricity/gas if prepaid, possibly pay deposits for other utilities etc

Again fairly easily pre-planned: you can get insurance quotes before you move in, check if the meters are pre-paid or regular credit meters etc, get quotes for moving costs. You can also decide whether you need all of the white goods immediately.... most people can survive with a fridge and microwave if needs be, or even ditch the microwave. Not ideal in the long run, but for surviving until you have the next spare £500, it'll do.

Overall, then
The costs can vary from £1000 (of which £100 is up front and £900 on completion), to £3000+ (£1000 up front, £1000 plus stamp duty on completion and £1000 just afterwards)

Chances are you're looking at somewhere around the £2k mark plus a little buffer.

Work out what you need: most of it you can plan for early by talking to solicitors and your lender, planning your white goods etc and calculating stamp duty etc: you'll probably want to have £500 "slush fund" handy though, for the guaranteed extras that pop up. Moving costs obviously depends on your circumstances, it's surprising what you can fit in a family hatchback.

Malmo

I've had a look on the forums and MSE pages and couldn't find much about typical timescales in buying a place

Have a read of this MSE article which describes a simplified timeline and milestones of the buying process. It doesn't really factor in the complexities of a chain and the impact of that on the end to end process, but it is still useful as a guide.

Here is also a MSE guide that refers to the likely buying fees & costs to factor in and when they may be due.

Malmo

Although this thread is primarily about timescales & costs, I'd also urge you to take the time to thoroughly review your credit files/reports from all 3 Credit Reference Agencies (Experian, Equifax, Callcredit/Noddle).

I've read countless threads here where posters haven't done this in preparation ahead of time and have had problems either obtaining a mortgage AIP/DIP or have been refused at full application or underwriting.

Take a look at this post for what you should do.

piggeh

audigex wrote: »

Yeah I'd potentially look to have available

Up front (£100-1000)
£500 solicitor fees for searches
£100-400 Valuation/surveyor fees (are these not the same thing?)

Note that you should be able to contact your prospective solicitor and lender and confirm these charges up front: my own is looking to be £150 for a valuation and that's it, but both together could be £1000. Chances are you can choose carefully to ensure you're towards the bottom end

On completion in order to secure the house (£600-2000+)
£600 (?) remainder of solicitors fees
£1200 stamp duty if relevant (not an issue if you're buying for under £125k)

Again these are easily pre-planned as you should already have a quote from the solicitor and stamp duty is easily checked

Immediately after completion to actually move in - I'd reckon on having £1000 handy if possible
£400 moving costs
£400 White goods if needed (£400 sounds sensible for a basic fridge/freezer, washer/dryer and microwave, but possible a little more if you need a cooker too)
£100-400 to pay insurance, electricity/gas if prepaid, possibly pay deposits for other utilities etc

Again fairly easily pre-planned: you can get insurance quotes before you move in, check if the meters are pre-paid or regular credit meters etc, get quotes for moving costs. You can also decide whether you need all of the white goods immediately.... most people can survive with a fridge and microwave if needs be, or even ditch the microwave. Not ideal in the long run, but for surviving until you have the next spare £500, it'll do.

Overall, then
The costs can vary from £1000 (of which £100 is up front and £900 on completion), to £3000+ (£1000 up front, £1000 plus stamp duty on completion and £1000 just afterwards)

Chances are you're looking at somewhere around the £2k mark plus a little buffer.

Work out what you need: most of it you can plan for early by talking to solicitors and your lender, planning your white goods etc and calculating stamp duty etc: you'll probably want to have £500 "slush fund" handy though, for the guaranteed extras that pop up. Moving costs obviously depends on your circumstances, it's surprising what you can fit in a family hatchback.

You'd be surprised how little fits into a Suzuki Swift :P But hopefully it will only be down the road, I had to do about 7 trips when I moved into the current place and then got the bigger stuff moved by man & van so would do the same again.

Thanks for the advice, I will pop into the bank in the next few weeks and see if they can give an idea on costs from their side and go from there. Looks like I might be best holding off an extra month just to give myself a bit of breathing space.

piggeh

Malmo wrote: »

Although this thread is primarily about timescales & costs, I'd also urge you to take the time to thoroughly review your credit files/reports from all 3 Credit Reference Agencies (Experian, Equifax, Callcredit/Noddle).

I've read countless threads here where posters haven't done this in preparation ahead of time and have had problems either obtaining a mortgage AIP/DIP or have been refused at full application or underwriting.

Take a look at this post for what you should do.

I have checked them although it was about two years ago now, so probably worth checking again. They were all nicely up to date with bankruptcy from 2004 falling off and everything being green, so hopefully no issues.

audigex

Definitely worth checking again, it only costs a few quid (or free if you take out their "free month" offer and cancel within a month)

Fair point about the Suzuki so yeah I'd factor some of that man with van cost into the purchase.

I've got no idea how representative this is of the rest of the country, but I've just had my quote from my solicitor today, buying at a purchase price of £95k, and the costs are looking to be £650 all told, including searches, registering with the Land Registry, and solicitors fees of £380+VAT including a 10% FTB discount. I believe I've got to pay around £200 of that up front.